Digital Innovation and Infrastructure Financing Models
Organizations have relied on land, human, financial, and intellectual capital to grow and compete over the last centuries. Now there is a new form of resource in town, data.
Digitalization of infrastructure involves capturing, documenting, integrating, and analyzing infrastructure data to enhance performance and utilization. A wide range of infrastructure data set and processes can include original design specifications, design data, fabrication verification, construction inspection, commissioning confirmation, operational history, inspection reports, maintenance, retrofit, asset repurposing, operation, and decommissioning.
Factors of Infrastructure Digitalization
Digitalization of infrastructure goes further than deploying technologies to collect data. The resources used to initial, design, deploy, service, and manage are the factors of digitalization. They are the building blocks of an efficient and effective digitalized platform. The factors of infrastructure digitalization are categorized as leadership, technology platform, adoption, and entrepreneurship.
Data are always available, and digitalization goes further than deploying gadgets. While the deployment of technology can enhance the assets of an organization, capable and forward-looking data leadership is essential. The data leadership’s role is to ensure that all infrastructure stakeholders are appropriately well informed of the effectiveness of leveraging the digital platform in delivering a broad range of services from concept design to operation and decommissioning.
"Data Leadership is the of an efficient and effective digitalized platform. The other factors of infrastructure digitalization are technology platform, adoption, and entrepreneurship."
A successful infrastructure digitalization requires appropriate configuration and integration of a technology platform. To achieve this involves business consulting to identify processes associated with the infrastructure; engineering consulting to select and integrate the required engineering analytics, and software development and integration to ensure the specific technology platform and tools are configured and deployed so that they directly fit into the owner’s and broader infrastructure stakeholders’ business processes and engineering needs. (Birdsall, 2021)
Integration and Adoption
The optimum utilization of infrastructure digitalization is dependent on the efficiency of system integration, technology adoption by stakeholders, and long-term usage within operation and maintenance phases far beyond the infrastructure design and construction phases. To achieve broad stakeholder adoption and long-term use, digital platforms need to deliver stable, high-quality data, Big Data to Smart Data, data communication, visualization and user interfaces, management of incomplete and incorrect data, data accessibility, data sources with different formats, data security, and cross-platform-compatible.
"Increased infrastructure digitalization requires substantial investment. Universal broadband connectivity in Africa alone will cost about $100 billion."
Increased infrastructure digitalization requires substantial investment. As a reference, a report by the Broadband Commission for Sustainable Development estimates that the cost of universal broadband connectivity in Africa alone will be about $100 billion.
The essential nature of telecom services for economic growth and human well-being became abundantly clear during the COVID-19 pandemic. Wealthy nations quickly routed business, health care, and education through the telecom sector, while many of the world’s poorest countries struggled to provide connectivity. (Carlo Maria Rossotto, 2021) For infrastructure digitalization to be fully utilized effectively, upgrades to telecom technology must be made available around the world.
All data can be captured, but not all data are helpful. The usability of data depends entirely on how they are presented to the consumers. Digital entrepreneurs combine the three factors of digitalization with capital and take the economic risk of presenting data in consumer-friendly form with the hope of making a profit. While more digital entrepreneurs must contribute to infrastructure digitalization growth, the government and private sectors continue supporting digital entrepreneurs with financing and policies that encourage digitalization businesses.
Digitalization and Infrastructure Financing
Using digital technologies to expand infrastructure supply, improve demand management, and enhance the overall quality of the services are the main objectives of infrastructure digitalization. Technologies like smart meters in properties to control and manage residential electricity consumption, smartphone apps to monitor the consumption of home appliances, remote digital sensors to measure and control water pressure, and digital screens in bus, train, and metro stations to inform passengers on the arrival of the following vehicle.
"Digital entrepreneurs combine the factors of digitalization with capital and take the economic risk of presenting data in a consumer-friendly form, with the hope of making a profit."
Data Natural Resources
Land in economics refers to all of the natural resources that businesses need to make and distribute goods and services and was designated as the origin of economic value by the physiocrats, a collection of French economists who came before the better-known classical political economists (Smith, Ricardo, Marx, and others).
Organizations are challenged with rising clients’ expectations for seamless digital services, diminishing return on investments, and competition from emerging players to increased regulation, pricing pressures, and global disruptions to operations and supply chains. They have relied on land, human, financial, and intellectual capital to grow and compete over the last centuries. Now there is a new form of resource in town, data.
"What is valid for land in the 17th Century is true for data as a result of technological advancement."
What is valid for land in the 17th Century is true for data as a result of technological advancement. Data is a natural resource more available than land, a gift that is given by nature. Data is essential to the government and industries to survive and thrive in this digital age. Soon, data will be an asset reported and accounted for in a company’s balance sheet and be reflected in calculating a company’s market capitalization value. (Jain, 2020)
Data aggregated and presented through an integrated digital platform can provide knowledge and analytical tools to maximize the return on investment in infrastructure. Data generated by the infrastructure can be attractive in developing new business models to hedge risk, enhance efficiencies, create new revenue models, introduce new infrastructure financing technology or value well beyond the infrastructure itself.
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